August 29, 2007
BPO service provider Firstsource Solutions has acquired US-based MedAssist Holding, a provider of revenue cycle management for healthcare industry, for $330 million. The acquisition will enable the Indian company to foray into the provider side (hospitals end) of healthcare BPO services, estimated to be around $700 billion.
The acquisition is subject to regulatory approvals under the US Hart- Scott-Rodino Anti Trust Improvements Act of 1976, the company said in a release here today.
Firstsource also stated that there would be no change in the management of MedAssist and all employees would continue in their current jobs. "The healthcare space in the US is attractive from a BPO perspective. MedAssist has a portfolio of service offerings, an excellent customer base and a strong management team. We see significant opportunity to grow our business in the segment by cross-selling Firstsource's services to MedAssist's customers," Firstsource Managing Director & CEO Ananda Mukerji said.
The company already has a strong presence in the payor side (insurance company end), and this acquisition enables the company to provide a full range of healthcare BPO services, he added.
Hospital care in the US amounts to $700 billion, while administrative costs are stated to be around $100 billion. This results in increasing of revenue and cost pressure on healthcare providers, who are looking at outsourcing to contain costs.
MedAssist's capabilities provide Firstsource with a pan-American presence in this provider segment, consisting of over 5,000 hospitals nation-wide. Kentucky-headquartered MedAssist's revenues stood at $99 million for the year ended December 31, 2006. At present, it has over 1,400 employees and offers eligibility services, receivables management services and post-default collections services for healthcare providers. The company has over 1,000 clients including hospitals, large physician groups and alternate site providers.
MedAssist President and CEO Michael Shea said, "Becoming part of the Firstsource family is a positive step for our customers and employees. With Firstsource we will have tremendous financial strength and the opportunity to grow in both scale and reach that we would otherwise not be able to achieve both nationally and globally."
Firstsource provides end-to-end services, including mail and document management services, policy administration, claims processing, claims pricing, claims adjudication, and adjustment, and healthcare provider database maintenance. |
